Have Business Name, Will Travel: Navigating State Name Requirements

Betsy Gonzalez
Posted on December 12, 2018 by Betsy Gonzalez in Business Compliance.

What’s in a name? When it comes to businesses, a lot more than you might think. From use of surnames to suffixes to punctuation, each state spells out, literally, its own particular set of naming requirements. Businesses that want to form a new entity or expand into a new state need to ensure their name of choice meets the specs, down to the last period. For multi-state businesses, that could mean doing business under one or more fictitious names as their territory expands.

By understanding the factors that influence name approval and your options when crossing state lines, you can plan ahead and navigate state borders more easily and efficiently.

Name Availability

The first hurdle to cross when planning your business name is to ensure that it isn’t already taken, or so close to another business’s name as to cause confusion. Each state provides detailed guidelines for gauging whether a name is distinctive enough. In most states, a name availability search can determine whether your desired name is a viable option.

Entity Types, Suffixes, and Endings

Broadly speaking, states require a company’s name to accurately reflect the kind of entity that it is. For example, many states require the name of an LLC to contain the words “limited liability company,” or an abbreviated form of those terms. Companies may be similarly barred from adopting those terms where they don’t apply, for example, using the word “corporation” for an unincorporated entity.

Each state has adopted its own set of requirements to promote accurate business names. The result is a patchwork of close, but not identical, requirements, which can create headaches for companies as they grow. For example, a few states allow LLCs to file under the designation “limited company” in addition to “limited liability company.” A company that forms under the shorter designation may need to amend its name to expand into a state that requires “limited liability company” in its entirety.

Connecticut gets extra points for flair in this category as the only state that specifically invites “Societa per Azioni,” or S.p.A., as a corporate designator. While a choice like that might be less “portable” when moving from state to state, there are some states that allow for foreign language equivalents and substantially similar terminology in their name requirements, providing some latitude.

If you expect your business to expand over time, look at name requirements for your particular entity type nationwide to get a feel for inclusive language. Then again, if you love the sound of S.p.A., go for it—just know you may have to file name amendments or fictitious names as your horizons expand.

Some states require names to include entity-specific endings. For example, Ohio requires the name of a business corporation to end with “company,” “corporation,” “incorporated,” or the abbreviations “co.,” “corp.,” or “inc.”

When it comes to suffixes such as LLC and Inc., states often specify how they should be punctuated. For that reason, it’s important to check state specifications and follow them to the letter wherever your name appears—especially in official documents and government paperwork.

Licensed Professions

Most states provide dedicated structures such as professional corporations (PCs) and professional LLCs (PLLCs) for licensed professionals, and these carry specific language requirements. In some states, professional firms may be required to include language indicating the type of service they provide, while in others, they may be barred from doing so.

Some requirements are specific to the licensed profession. For example, many states restrict references to licensed professions such as “engineer,” “surveyor,” “architect” and “design.” Once again, depending on the state, a firm may be required, permitted, or barred from referencing the licensed profession in the name.

Licensed professionals may have special name requirements and extra steps to complete through their state licensing boards such as prior name approval. In some states, the name approval process begins with the board, and in others, it begins with the secretary of state (SOS). To avoid wasted paperwork, professional firms should check licensing board and SOS requirements side by side before beginning any applications.

Industries

States also impose broad-based restrictions of certain terminology based on industry. For example, use of financial terms such as “fidelity,” “finance,” “guaranty,” and “trust” is often restricted, as well as use of insurance terms such as “indemnity,” “assurance,” and “casualty.” Restrictions of terminology related to education, nonprofits, law enforcement, medicine, political subdivisions, and utilities are common.

Surnames

References to the names of individuals are also frequently restricted. In New Jersey, for example, the name of a professional corporation must contain the name of one or more shareholders or a name descriptive of the type of professional service being offered, among other requirements. In some states, individuals referenced in the business name must be licensed professionals.

What to Do When Your Business Name Won’t Fly

If your existing business name is not available in a new state, or if it doesn’t conform with requirements, one solution is to amend your company’s name. Businesses will generally consider this option if they’re contemplating a broader change such as a rebrand, launching a major expansion that presents many name conflicts, or if their original name has become obsolete as their operations expanded.

The more common solution is to adopt an assumed or fictitious name. The process varies, but this is usually done by filing with the secretary of state. Fictitious names do not generally enjoy the same level of protection against use by other businesses as other registered names.

In most cases, fictitious names must be renewed, typically every five years. Assumed names may also need to be registered at the county level.

Tips for Choosing Travel-Friendly Names

  • When forming a new entity, research a sampling of state name restrictions for your entity type and industry to get an idea of inclusive language.
  • Check for suffix and ending requirements.
  • Prepare applications carefully, down to the punctuation, to avoid rejections.
  • Review lists of restricted and prohibited words published by the state corporations division before proceeding with a name choice, including industry-specific terms.
  • If you are working in a licensed profession, pay close attention to name requirements and processes prescribed by the secretary of state and your state licensing board.

The Shortest Path to State Approval

If you’d like to dispense with the government paperwork and just get on with your plans, we can help. Our specialists will handle all the paperwork, from research and application preparation through filing and follow-up. With our unique combination of white-glove service and compliance software, you can enjoy the benefits of total compliance without sweating the details, no matter how many jurisdictions and entities you need to track. Just contact us or give us a call, 1-888-995-5895. We’re eager to help.


© 2012 - 2020 Harbor Compliance. All rights reserved. Harbor Compliance does not provide tax, financial, or legal advice. Use of our services does not create an attorney-client relationship. Harbor Compliance is not acting as your attorney and does not review information you provide to us for legal accuracy or sufficiency. Access to our website is subject to our Terms of Use and Service Agreement.